Bear State posts $3.7 million 4Q profit ahead of Arvest takeover

by Wesley Brown ([email protected]) 596 views 

Little Rock-based Bear State Financial Inc. closed out its final earnings period Thursday, (Jan. 18) as a publicly traded concern. For the period ended Dec. 31, the Arkansas community bank reported fourth quarter earnings of $3.7 million or 10 cents per share, down 23% from $4.8 million or 13 cents per share in the same period of 2016.

For the full year of 2017, Bear State’s net income grew to $20.4 million or 54 cents per share, up 17.4% from $17.5 million or 46 cents a year ago. Both the quarterly and year-ending financial results were reduced by a one-time charge of $2.5 million related to Tax Cuts and Jobs Act signed into law on Dec. 22.

On Aug. 22, Fayetteville-based Arvest Bank announced plans to acquire Bear State in a deal valued at $391 million. Company officials said the deal is expected to close no later than the first quarter of 2018, and will push Arvest to almost $20 billion in assets, just behind Bank of the Ozarks.

Before Bear State announced its surprise deal with Arvest in the third quarter, Bear State Bank had been on a growth spurt after the former Harrison-based First Federal Bancshares moved its corporate headquarters to central Arkansas.

Ahead of the merger, Bear State Bank operated 42 branches, three technology centers equipped with interactive teller machines and three loan production offices in Arkansas, Missouri and Oklahoma. In the second quarter of 2017, Bear State reported second-quarter earnings of $6.7 million on record revenue of $23.4 million, a spike of 12% from a year ago.

At year’s end, Bear State had total assets of $2.16 billion, a 5% increase that was primarily due to increases in investment securities and loans. The bank’s deposits in 2017 grew to a robust $1.5 billion, a 9% decrease compared to $1.64 billion for the same period of 2016.

Total loans for the fast-growing Arkansas community bank were $1.67 billion for the full-year, an increase of 8% to $117 million. Total stockholders’ equity was $252.2 million for the year, up 8% from $233.4 million a year ago. Tangible common stockholders’ equity was $202.7, an 11% increase from $182.9 million in 2016.

Bear State will add to Arvest’s growing portfolio of more than 250 bank branches in Arkansas, Oklahoma, Missouri and Kansas that operate in 16 markets. The bank posted $17.298 billion in assets at end of second quarter.

Arvest has operations in 18 of the 34 markets in which Bear State operates. The new cities and towns for Arvest in Arkansas are: Ashdown, De Queen, Dierks, Glenwood, Jonesboro, Manila, Monette, Mount Ida, Nashville and Waldron. In Missouri the new cities and towns are Golden City, Kimberling City, Lamar and Marshfield; and Broken Bow and Idabel in Oklahoma.

Arvest is privately held with Jim Walton, son of Wal-Mart Stores co-founders Helen and Sam Walton, serving as chairman and CEO of Arvest Bank Group.

In early trading on Thursday, Bear State shares (NASDAQ: BSF) were up one cent at $10.27. The all-cash transaction with Arvest values Bear State’s common stock at $10.28 per share.